Founder Fridays No. 100
Pricing Tactics to Fight Inflation -- Effective Core Values -- Steve Jobs on Persuasion
Welcome to our 100th issue of Founder Fridays!
It started with a handful of friends and has grown to nearly 40,000 startup founders and operators – what a journey it's been. I'm continually amazed by your engagement. Almost every week I hear how the newsletter is making a positive impact on your entrepreneurial journey. It’s incredibly humbling and motivating.
As we hit this milestone, I want to express my heartfelt thanks to each of you. Your support and feedback drive me to keep delivering insights that matter.
Here's to the next 100 issues and beyond!
Pricing Tactics to Fight Inflation
Startups facing margin erosion due to inflation can: 1) add price escalation terms to contracts, which include an inflation component (typically a consumer price index, CPI) and a 3%-5% increase for product improvements; 2) review pricing strategy and compare prices to the value generated to ensure prices match what customers are willing to pay; 3) focus on premium products with higher margins and average contract values to improve cash flow; and 4) optimize controllable costs through asset management, aligning infrastructure to reduce demand; rationalizing portfolio and infrastructure; and offering tiered, need-based service levels to help mitigate the impact of inflation. Insight Partners (5 minutes)
Effective Core Values
Effective core values should be distinct, actionable principles that define the desired behaviors and nonnegotiable standards within the organization, going beyond generic traits like honesty and teamwork. To develop strong core values, leaders must reflect on the specific behaviors they want to encourage or discourage, ensuring the values resonate deeply with the team and represent the DNA of their best people. Core values should be regularly referenced in decision-making; used in hiring, firing and promoting; and celebrated through employee recognition and storytelling. When properly defined and lived, core values empower employees, guide behavior, foster a positive culture and drive the organization toward its goals, often removing the need for excessive rules. Friday Forward (7 minutes)
Steve Jobs on Persuasion
Here are the key takeaways for founders from Steve Jobs' three powerful persuasion tactics: 1) Emphasize the effort and hard work that goes into developing your products or services. This leverages the Labor Illusion Effect, making customers appreciate and value your offerings more. 2) Associate your brand with respected, visionary figures or brands to harness the Halo Effect. This creates positive associations that can boost your brand's perception and appeal. 3) Make your products or services visually distinctive and memorable. Standing out from the competition by being different and easily recognizable can create a lasting impression on potential customers. Hubspot (5 minutes)
Founder FAQ: What Is the Difference Between Single Trigger and Double Trigger Acceleration?
Single-trigger and double-trigger acceleration are two different vesting provisions for employee stock options in the event of a company acquisition. Single-trigger acceleration fully vests an employee's unvested shares upon the occurrence of a single event, typically the acquisition itself. In contrast, double-trigger acceleration requires two separate events to occur before vesting is accelerated: first, the acquisition of the company, and second, the termination of the employee without cause. While single-trigger acceleration is more favorable to employees, double-trigger acceleration has become the standard in startup equity as it protects both employees and acquirers by ensuring fair compensation for employees terminated post-acquisition while also incentivizing them to remain committed to the company's success. Westaway (5 minutes)
Startup Funding Guides
I’ve put together a series of guides to equip founders to excel at fundraising. These guides break down the deal term by term and give you negotiation tips so that you can speak to investors with confidence.
Convertible Note: Guide / Video
Control Legal Spend
Startups suffer from unpredictable legal bills under the billable hour system. Fees fluctuate month to month without warning. Law firms drag out billable hours, but startups foot the bill. Even basic work can lead to surprisingly high legal bills. This unpredictability cripples financial planning. Budgets rarely match actual spending. With utter uncertainty around legal spending, startups cannot forecast or manage burn rates effectively. The antiquated billable hour system fails them. Our General Counsel’s flat, monthly fee service gives startups cost certainty. Legal spending becomes predictable with bundled services and no surprise overage bills. By switching from hourly to our flat-fee model, startups finally get confident budgeting, accurate forecasting and predictable legal spend. If you’re sick of getting surprise legal bills and are interested in controlling your legal spending, let’s talk.